The British Columbia government attracted $54.5 million at its monthly natural gas and petroleum sale, powered by a large bonus bid of $42.41 million as producers keep pushing the boundaries of the Montney.
B.C. sold 12,052 hectares at an average of $4,522.44, the highest per-hectare price at a single sale so far in 2013. Provincial land sale revenues continue outpacing last year’s figures with $217 million filling government coffers after 11 sales of 107,135 hectares at an average of $2,025.55. To the same point of 2012, the government had collected $108.69 million on 106,128 hectares at an average price of $1,024.16.
Charter Land Services Inc. paid the bonus high of $42.41 million on behalf of its client for the 6,148-hectare licence at an average of $6,897.54. The parcel included six tracts.
This parcel is the 22nd highest all-time bonus paid for a single parcel in B.C., according to Daily Oil Bulletin statistics. The highest price paid for a single parcel was $156.84 million, which was acquired by Standard Land Company Inc. at the sale on July 16, 2008. That year, B.C. attracted a record $2.66 billion in bonus bids.
Brad Hayes, president of Petrel Robertson Consulting Ltd., said that this parcel and a further three leases that combined for bonus bids of $2.23 million and per-hectare averages of $1,500, $4,000.87 and $2,500, respectively, (each one totalling 279 hectares) are all in the same area on the western flank of the Laprise Creek Field, which historically has produced gas primarily from the Baldonnel.
“In several tracts, deeper rights below [the] Baldonnel are posted,” he said. “The high bids, deeper rights and large land area are strong indicators that operators are pushing the boundary of the Montney play fairway to the northeast of currently mapped limits – and with a high degree of confidence, given the dollars exposed.”
Steve Hager, senior exploration analyst with Canadian Discovery Ltd., said that the high bid parcel has various petroleum and natural gas (P&NG) rights, including the Triassic Montney formation, which is being developed for liquids-rich gas by Progress Energy Canada Ltd., a division of Petronas of Malaysia, and others in the North Montney resource play centred in the Town Field to the southwest of the subject parcel.
Recent Montney horizontal drilling by Progress, UGR Blair Creek Ltd. and Carmel Bay Exploration Ltd. is located along a northwest/southeast trend at Jedney and Bubbles to the southwest of the expensive licence, he added.
To the southwest of this in the Cypress area, about 110 kilometres northwest of Hudson’s Hope, Windfall Resources Ltd. picked up a 3,106-hectare licence for $8.97 million. The broker paid an average price of $2,888 for two tracts.
